City Council - Regular Meeting

public hearing constructive. All right, we will call the uh truth and taxation meeting to order. Melissa, thank you first of all for stepping in being the inter room finance. I know this is maybe something new for you, but I have full confidence in your ability to get us through this truth and taxation meeting. Appreciate that.

My name is Melissa Wilson. I'm senior counly interim finance director. And tonight I'm going to present to you the 2026 proposed tax levy and operating budget. um a timeline of how we got to today. Um started back in June 2025 with the initial um discussions with mayor and council and continued to debate the budget and tax levy through um July and August. At the September 2nd, 2025 work session. They approved a 10.29% 2 9% levy increase. And on September 15th at the council meeting, a preliminary tax levy levy and budget was approved for a 7.5% increase um after further review of prior sessions. Brings us to tonight, December 3rd, 2025. We're doing the truth and taxation um and account hopeful approval of tax levy and budget for 2026 [clears throat] on December 15, 2025. Um, our proposed tax levy for 2026 totals 10,535,000. Um, which equates to a 7.5% levy increase. And on the slide shows some comparisons to 2024 and 2025. And the 7.5 increase mainly consists of um covering wage and benefit increases um for the upcoming contract negotiations.

That's the majority of the increase also with street projects and those kinds of things. [snorts] And this is just a split of what our tax dollar goes to cover for 2026. 45% is for the city, 34% to the county, 19% to its schools, and 2% of other. The next slide shows um the budgeted team member investment which is just a breakdown of salaries and benefits for the different funds that employee costs get coded to. If you want longer time to look at the slides or have questions, this next slide is just going to give expenses that so full-time wages of $13,760,945 temporary wages which um also consist with of overtime and on call is1,11,721 and [clears throat] benefits are 5,881 881,333 which is about 68% of the general fund budget [clears throat] is the employing cost. Um, next year we also have an election. So we have the uh increase in temporary wages and work comp insurance continues to be trending way.

Well, on that one, does the paid family leave stuff that the state's now putting in, does that impact it and increase our costs? It does and that is included um um on that breakdown between disability and unemployment. So we are having that cost estimated cost um in there already. Got it. So as we talk as we hear from the state about how this is a gamecher, businesses are paying for it, cities are paying for it, taxpayers are paying.

Um this slide just shows a breakdown of the proposed revenue sources. Um property taxes, which is our tax levy, 10,535,000. Um the intergovernmental revenue at 10,478 333. Um our enterprise funds 15,77,521. Um the internal service funds uh 8,66,166 and the other sources of $6,864,472. And just another little bit of a breakdown of our expenditures um between uh the different factors of government. General government at uh just over 3 million um capital outlay will be uh 1.6 million business development 346,000 culture and recreation 4.3 million streets and highways at 4.4 4 million public safeties um just under 10 million and transfers of 46,000. Here's our tax levy um trend over the last 10 years beginning in 2017 and ending with the current 10.5 million for 2026. This is just a further explanation or breakdown of what our actual tax rate is um over the last 10 years. Also, the trend fluctuates based on valuation.

I think I've always thought I mean this one feels like a really important slide because obviously the tax levy is going to go up, right? Wages go up, police cars are more expensive. In theory, revenues from state you know, as we expand the commercial base of the city goes up as well. Um, so I think we were moving in a pretty good trajectory. Um, be interesting to see where 2026 comes in. So

the next slide is showing um the breakdown of uh the general fund expenditures which total 23,729,687 um with the breakdown of general administration just over three million public safety just under 10 million streets and highways 4.4 [cough]

parks and rack 4.3 and other capital outlay in such at just over two million. And the next few slides are just going to show um what our expenditures are in our different um types of funds. So, our special revenue funds which include recreation programs and the library total budget of 1,824,318. Um there's a little bit of a breakdown as far as what goes to wages, books, repair and maintenance and such. The next is going to show our debt service fund expenditures. Um, which we have no outstanding debt for another year in a row. Not sure how far that goes back, but that's a good feeling. Um, our TIFF debt service total budget is $552,600.

And Melissa, remind me the wastewater treatment plan. We didn't have to like take on any debt for that, right? Did we issue bonds or did I I believe we issued bonds. Okay. PFA bonds was that we did them through the PFA. Yeah. Okay. So that wouldn't be incorporated here. But in terms like operating debt, we don't have anything. And then for assets that are going to last 100 years. Okay. And that was Craig reminded me was that then so we issued the bonds but it's not like we're taking tax dollars to pay it down from operating funds. It was more of here's wastewater fees, sewer fees, things like that.

Significant increase. As you you know, over time we increased them by 75% to be able to get up to where we can accommodate that hund00 million plus facility coming online, but they're supported by wastewater rates.

Our capital capital improvement revolving fund. Um this covers non-state aid street projects, trails and haz hazardous building removal and signage. Um total uh budget of 1,771,000. It shows a little bit of breakdown of the difference between the street projects and the hazardous building and what comes from tax levy and what comes from grants. Next we go to our enterprise funds um shows the breakdown of the sewer user uh which has a total budget of 12,576 $763. uh our waste transfer station with a total budget of $74,580 and our storm water utility district fund with a total budget of1,349,514 with a breakdown of each of those between wages, supplies, capital outlay, um repair and maintenance, depreciation, that kind of stuff. Following slide shows our port authority fund total budget of 1 million76,664 shows what we currently own Walker building formal institute phase two and some land throughout the city. Next we go to our internal service funds. This is going to be our central garage. Our MIS fund, fire fleet replacement, and our risk management fund. Central garage has a total budget 3,646,452.

MIS fund $53,46. Fire fleet replacement 260,000

risk management total budget of 4,26,38. Again a breakdown with what those expenditures are made up of. Any questions? And my final slide just shows what our annual $750 on an average $150,000 um $150,000 home in the city will get you. get you 24-hour police and fire coverage, library, nature center, parks and equipment, pools, arenas, trails, uh well well functioning moist water treatment plant that is in process of being completely renovated, clean storm water, well-run elections, economic development, pressing QA attorney help and dedicated city staff to meet the needs. That's all I have. Are there any questions? [clears throat]

Well done, Melissa. So, we got a vote on this. Approve it on the on the 15th of December. 15th of December. That's what we'll do next. If everybody's got nobody's got any questions for um there is some public hearing. There is a public hearing. If anybody wants to talk other things other than pickle ball, I'd love to hear. [laughter] Sarah, are you here? I got a question. Sure. Would you come up to the microphone if you could please? We're on YouTube. Thank you, Melissa. Good job. Thanks, Melissa. Nice work. Thanks, Melissa. [cough] Way clearer than Tom Danker used to do. [laughter] I hope he's watching. Much much quicker, too. I was going to say that's true. The brevity was really nice. No, no, [laughter] you did a fine job. Welcome, sir. What's your name and address, please?

Um Alan Gribbrook, 21106 9th Street Southwest. Um I just had a question. You had a slide on there about the valuations actually per thousand dollar it went down in taxes.

Okay. I think the housing values are starting to come down a little bit now. It seems like you're starting to see houses, you know, you know, uh $20,000 off and stuff. My farm in Freeborn County, [clears throat] my taxes went up $5,000 just about on my farmland and my valuations went down over 400,000. So, what's going to happen if the houses come down? You know, our taxes are not going to go down like it proved on farmland. You know, if I, you know, my valuations are down that much and my taxes went up that much. I know that the county does the assessing and I know that recently they just did an update on the businesses were the last one. Residential was about three years ago or so. So, I think they they brought them up a lot where people noticed because I think everybody got about 20% increase on their valuation based on home sales and other things. county keeps pretty good track in that. I I hope they they guard against fluctuations huge like that.

Well, all based on sales. Yeah. And and just for me, can we walk through the difference between the valuation and the tax levy? Because just because the valuations went up doesn't mean we get 20% more on our levy, right? We levy what we levy and it's spread out among all the households and businesses based on their valuation. So when my valuation went up 20% I'm going to pay more taxes than I did a year ago but the but someone else whose valuation stayed steady [snorts and cough] and went down is going to pay less. Yes.

So we don't get 10 million plus all the valuation growth. We get the 10 million we levied for. So when you see we we really and it's tricky because it's like well I just have to pay this bill and it's more than it was but there it's two levers. Um it's the valuation lever and the tax levy lever.

Yeah. And if I understand correctly, I think that's it's set by the state. So it's like okay, take Freeborn County just for an example, right? Like Freeborn County, the Freeborn County Commission levies, [clears throat] let's call it $50 million of taxes. I have no idea, but ballpark. So if their tax levy is $50 million, they've got to get the $50 million from people who own property in Freeborn County. Now, if your farm went down, your contribution to that $50 million may be less if some other business goes up. But if your farm goes down and a business goes down and the housing goes down, the pie didn't change. They still need $50 million from the residents. And so if I understand correctly, I think the state is does the valuations and the balances. The county values, the state has it as a whole. Still confusing as all hell, but yeah, it's we've got a tax levy of $10.1 million. We'll collect $10.1 million this year. Exactly which properties and how much we collect it from is entirely based then on how properties are balanced relative to each other within the city of Austin. Is that fair?

Yep. Okay. Yeah, I was just kind of, you know, saying in that slide valuate, you know, so actually it actually went down, but when for valuations go down, it's going to go up because we're still going to need that tax.

Yep. That's exactly the only way it would go down is if they came back next year and said, "We're only going to collect $45 million in taxes or [clears throat] if they were able to expand the tax base." And that's one one of the things that we've been very focused on as a city is if you could okay, we're going to collect $50 million, but if somebody builds a massive business in town that now land that was worth a little bit is worth a ton because you've got a hund00 million building on it, the taxes they're paying on that help to offset your taxes. And that's why as we think about, you know, why does the city participate in economic development? You know, we just finished a port authority meeting. like why are we so focused on trying to attract new businesses, get new housing built is ultimately it spreads the pie out over a larger group because stuff will continue to cost more. Honestly, that's how the suburbs are able to keep their property taxes relatively low is you build another thousand houses, all of a sudden you got a thousand more people paying property taxes to help offset that. So this also folds into why a year ago we added a code enforcement and resource officer because as the city we want to preserve the value in our housing. So we want to intervene with houses that are starting to get run down before they're too far gone and get um torn down because when they to tear that house down now whatever taxes that parcel was paying

right all the rest of us pick up. So, we are we're we're aware of that problem you're talking about of your housing stock and your property really needs to stay robust or else you got a bigger problem. And we're doing what we can within, you know, fiscal responsibility to keep preserving those and to bring economic growth in. Okay. Thank you. Thanks, Al. Appreciate it. Quiz Cullen on that later this weekend. See if he could explain it to you. All right. Uh, hearing no other public and nothing [cough and clears throat] with pickle ball to talk about. I guess we're looking at a 7.5% level increase and we'll vote officially on that on December 15th. Sounds good. I'll just take a motion to adjurnn. So moved. Second. All in favor?

Oppos? We are adjourned. Thanks, Melissa. Well done.